BRITISH Telecom chief executive Sir Peter Bonfield is to stand down at the end of January.

He will receive almost £1.5m in salary, bonus and benefits, and will also receive share awards worth £290,000 over three years.

Sir Peter, who joined BT at the beginning of 1996, had been expected to stand down early following completion of the firm's restructuring which is seeing it spin off its mobile arm, mmO2.

The 57-year-old director's contract ran to the end of next year, but Sir Peter had said he would stay until the restructuring was completed.

His pay-off breaks down to one-year's salary of £820,000, one year's bonus of £615,000, plus the value of other benefits such as a car and health insurance, totalling £50,000.

In addition to the £290,000 shares, Sir Peter has deferred bonus plan awards totalling 296,084 shares, which were worth £997,803 at Tuesday's closing price.

Sir Peter said: "My legacy is that the structure of the company is completely different from the structure when I took over."

However, he also pointed to expanding in the US as a low point in his tenure.

BT had attempted to merge with MCI of the US, in 1997 but the deal fell apart when Worldcom took over MCI.

However, he said: "It's been a hell of a ride - I really enjoyed it."

Commenting on his pay-off, Sir Peter said: "BT is a straightforward company, we honour employee contracts and treat people fairly and my contract will be honoured."

BT chairman Sir Christopher Bland said the firm had already begun to look for a successor to Sir Peter.

Sir Peter's reign however has not been an altogether smooth one, and he has been the target of city wrath as BT's debts mounted while shares fell.

Chavan Bhogaita, analyst at Bear Stearns, said: "I think people see this as a chance for the company to start afresh and get some new blood in.

"Obviously as chief executive, one would have to say Sir Peter must have had a large part in the company performing as it did.

"I think it was a little too aggressive in terms of expansion, and in bidding for third generation mobile licences.

"Basically, the end result was the company ended up with a huge debt mountain and it was not something it could turn around very easily. Its credit rating suffered and people's perception of the company dropped."